Many analysts have argued that the federal government should stop spending money on programs such as agricultural price supports and should redirect that spending to such things as improvements in the nation's roads and bridges
Construct an economic argument that supports this proposed change in policy.
Government spending on agricultural price supports amounts to a transfer of money from one group, taxpayers, to another group, farmers. As such there is no real increase in productive capacity. Furthermore, one could argue that the subsidies further distort market prices and send the wrong signals to farmers. In contrast, spending on roads and bridges (other than the "bridge to nowhere") contributes to an increase in the economy's infrastructure and, as such increases the economy's productive capacity over time.
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Long Beach Island, off the coast of New Jersey, is considering enhancing its system of satellite towers to help communication during emergencies such as hurricanes
A study showed that in Superstorm Sandy the existing number of satellite towers resulted in the marginal social cost of a satellite tower being less than the marginal social benefit. To achieve efficiency, this study indicates that the A) system should be left as is because the quantity of satellite towers is efficient. B) system should be reduced in size because the quantity of satellite towers is more than the efficient quantity. C) system should be expanded because the quantity of satellite towers is less than the efficient quantity. D) None of the above because the study erred in comparing the marginal social cost to the marginal social benefit since it should have compared the marginal private cost to the marginal private benefit.
An important problem facing the Fed is that
A) the goals for economic growth and price stability may conflict in the short run. B) it lost effective control over the monetary base. C) it has been given responsibility for meeting policy goals, but true control over monetary policy remains with Congress. D) it has been given responsibility for meeting policy goals, but true control over monetary policy remains with the President.